?? Inside Arbor Realty Trust; Bespoke eyes Manhattan … and more

Here’s THE RUNDOWN:??

?? Multifamily investors know and love Arbor Realty Trust. The lender has more than $43 billion spread across multiple multifamily portfolios. But some of those loans have started to go bad.?

?? Residential brokerage Bespoke is looking to bring its 1 percent commission structure to Manhattan. Low-commission model brokerages have often struggled in the city, but Bespoke’s Cody Vichinsky says this is different.

??? It’s been a tough year for multifamily. But few have had it as bad as LA’s developers. Some have abandoned the city entirely, seeking greener pastures (and friendlier governments) in places like Denver and Austin. A few things will need to change before they return.??

?? Kushner may be based in New York, but the family-run business has a growing South Florida portfolio. It just got bigger, as the firm picked up a distressed site in Surfside.?

?? San Francisco is one of the tightest housing markets in the country, with high prices and limited inventory. And rising interest rates hit the city hard, leaving some sellers discouraged. Now bidding wars are back, especially for single-family homes over $1 million.?

?? Grocery chain H-E-B is a household name in Texas. The company isn’t just a major player in groceries — it’s also shown an acumen for retail real estate. After a few years of upheaval in the industry, H-E-B has rewritten its playbook.

THE DETAILS:

?? The business of multifamily lending: Inside Arbor’s books

Arbor Realty Trust has a two-pronged business strategy. First, make short-term, floating-rate bridge loans to multifamily investors. Then, package the loans into bond-like collateralized loan obligations, and sell those to investors. But as distress comes for multifamily players like Applesway Investment Group, Arbor could find itself in a pickle, with little choice but to pay CLO investors out of pocket. So far, about 1 percent of Arbor’s loans are in trouble, but the number could rise fast.

?? Bespoke brings 1% commissions to Manhattan

Bespoke co-founder Cody Vichinsky says the residential industry is oversaturated with “overpaid” brokers who “don’t justify their value.” And he’s put his money where his mouth is, dropping sell-side commissions to just one percent. The model is working in the Hamptons – Vichinsky’s firm ranked sixth among Hamptons brokerages last year, with $880 million across 53 deals. Can he make it work in Manhattan? History suggests not, single low-commission brokerages have struggled to gain a foothold in the city. But things could be different this time.?

??? Why multifamily developers are having a brutal year in LA

Multifamily developers across the country have had a rough year, but those in LA may have had the worst. They’re facing many of the same problems as their counterparts across the country: rising interest rates and labor costs, for instance. But they have a few unique problems, too. California was hit hardest by the recent bank failures. Local politicians introduced an expensive transfer tax. As some developers look to build in new markets, the city’s last hope may be state lawmakers, who have hinted at pro-development policies.

?? Kushner picks up distressed Surfside site from Boymelgreen, lender?

Kushner Companies is continuing to grow its presence in South Florida, buying a distressed Surfside development site for $40 million. The family firm has plans to build a luxury rental building on the site. It’s the latest in a handful of luxury residential projects in Surfside, including Damac’s proposed condo tower on the Champlain Towers South collapse site.

?? They’re baa-aack: Bidding wars return to San Francisco?

For much of the past few years, home buyers could expect to get into a bidding war on a desirable home. In San Francisco, where inventory is limited, three-quarters of all homes sold above list price in early 2022. That changed as rising interest rates put a damper on home buying. Residential agents had to educate sellers: bidding wars were over, and homes were selling below listing. Now, bidding wars are back, especially for homes over $1 million. But it’s not all sunshine and rainbows for sellers.

?? How H-E-B rewrote the retail playbook

H-E-B has always been ahead of the competition. But it’s not just the groceries that set the company apart. It’s also the real estate. The grocer’s dedicated real estate team has shown impressive prescience, buying up land in quiet suburbs years before they develop into bustling towns. Years ago, the company mastered the practice of developing strip malls around its stores as a way of bringing in more foot traffic. Now, it’s moved on from that model. The new one: building the strip mall inside the store.

THE CLOSE:

Can Bespoke flip the script and make the low-commission model work in one of the most competitive markets in the world? Keep reading TheRealDeal.com to find out.